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WSJ: Apple deal with GT Advanced broke down over inability to provide iPhone 6 displays

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The Wall Street Journal has published new information about the breakdown of a deal between Apple and GT Advanced Technologies Inc. that led the latter to file for bankruptcy earlier this week. As was previously noted, Apple withheld a $139 million payment from the sapphire supplier, though the exact reasoning was unclear.

In a research note released yesterday, KGI confirmed that GTAT was Apple’s first choice for these displays because the company had created a process that provided superior drop test results. Now the Journal reports that the payment was withheld after GT Advanced failed to meet Apple’s requirements for the iPhone 6 display.

From the Wall Street Journal:

Apple and GT linked up in a $578 million financing arrangement that transformed GT from a supplier of solar power equipment to a manufacturer of synthetic sapphire that was supposed to be used in Apple’s new smartphones.

The iPhone 6 rolled out with Corning Inc.’s Gorilla glass instead, and GT filed for Chapter 11 protection in the U.S. Bankruptcy Court in New Hampshire, giving only a sketchy explanation of its financial situation.

The exact reason these displays weren’t ready to go in time for the iPhone 6 is still being questioned, with some saying it wasn’t tough enough for Apple’s standards and others saying GT’s supply simply couldn’t keep up with the demand. One source told the Journal that Apple was still interested in helping GT overcome the technical issues, though it seems that may no longer be the case.

GT has been less than forthcoming with information about its current situation, and filed a motion early this morning for a closed hearing.

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Comments

  1. iphone6splus - 9 years ago

    They wouldn’t have been ready with sapphire screens. This looks like an excuse to hold sapphire for 6S.

  2. Rodney Frey - 9 years ago

    I’m curious if sapphire bends as well as Gorilla glass…

  3. Lars Pallesen - 9 years ago

    Exactly as I thought then. This is the only explanation that makes sense. All you people who have been claiming that it was never Apple’s plan to put sapphire glass on the iPhone 6 display, where are you now?

  4. Cole (@LV_Hawki) - 9 years ago

    Come one people….. 6S the S always stand for something….4s=Siri, 5s=Sensor, 6s=Sapphire. I could of told you that last year……

    • smigit - 9 years ago

      You could put any character in place of the ‘s’ and come up with some unofficial link between it and one of the umpteen features introduced in the new model. I’m sure Apple has much better reasons to use the character ‘s’ than to make some obscure connection with the words “sensor” and “sapphire”.

  5. thickmcrunfast1 - 9 years ago

    Nobody cares. The current glass is fine.

  6. 89p13 - 9 years ago

    With that I’ve read about Sapphire and it’s tendency to shatter when dropped – I’m glad that Corning got the Gorilla Glass business. I can always change a screen protector if I get a surface scratch – but the idea of having to change the whole shattered display, if I dropped it, is not appealing.

    This story will continue to get more and more interesting as more details are released.

  7. baelim - 9 years ago

    This aligns to GT’s CEO claim that they missed the sapphire screen shipment by a beat. Initially I thought he was just trying to up his stock ante (later confirmed by his massive unload of this GT stocks) for sapphire is a bad bad material for touch screens. A hybrid screen would make more sense and ties multiple theories and claims together no? I still don’t quite put the CEO’s character in good light since he drove the company to chapter 11. His claim might be that Apple withheld payment but truth is that Apple is seeing a huge lag in their production due to the limited supply of sapphire that goes into literally every mobile product they own.

  8. internationalfatcats - 9 years ago

    GT Advanced sound like a bunch of idiots. Lawsuits by their investors and from Apple may be forthcoming.